Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — Investor Presentation (September 2016)
30 slides from Destination Xl's investor presentation, Sep 7, 2016
Slide 1: Investor Presentation September 2016
Investor Presentation September 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements: Certain information contained in this presentation, including, but not limited to, sales, gross margin, free cash flows, EBITDA, capital expenditures and store counts for fiscal 2016 and beyond, constitute forward-looking s
Slide 3: Investment Highlights
Investment Highlights Exclusive Merchandise Selection of Private Brands and National Designers International Franchise Strategy Will Add to Long-Term Revenue Growth Dominant Position in Growing Big & Tall Category P Powerful and Growing Brand Supported by a Differentiated Big & Tall Customer Experie
Slide 4: Dominant Position in the Big-and-Tall Market
Dominant Position in the Big-and-Tall Market Other retailers have had limited success in Big & Tall Only 4 stores owned by next-largest pure-play Two of DXL’s largest competitors attempted to create pure-play Big & Tall specialty concepts without success and closed all stores #1 online and brick-and
Slide 5: Access to Depth of National Brands Creates Competitive Advantage
Access to Depth of National Brands Creates Competitive Advantage Bringing national fashion-oriented brands to Big & Tall customers Strong exclusive Big & Tall relationships with many leading designers Collaborative relationship in design process creates consistent fit and reduces return rate Increas
Slide 6: Significant Increase in DXL Brand Awareness
Significant Increase in DXL Brand Awareness 2013 2014 2015* “End-of-Rack” customers are defined as customers with a waist size of 46” or less. 25-Point Increase Over Three Years *Beginning in fiscal 2015, the Company began measuring brand awareness on an annual basis.
Slide 7: End-of-Rack customers share of bottoms business
In Q2 2016, “End-of-Rack” customers were 44.1% of bottoms business compared to 42.9% in Q2 2015.
Slide 8: End of Rack Customers Generate More Value to DXL
End of Rack Customers Generate More Value to DXL Through July of 2016, End of Rack consumers visited 52% more often than 48”+ consumers. This is up from last year’s 46% higher rate of visits that our End of Rack Customers contributed over our 48”+ customers. Through July of 2016, End of Rack consume
Slide 9: New Stores are Opening with More End of Rack Customers
New Stores are Opening with More End of Rack Customers Than Previous Years New Stores: First Year Through Week 30 End of Rack % 2013 39.9% 2014 41.2% 2015 42.3% 2016 43.6%
Slide 10: DXL Store Concept Designed Specifically for the Big & Tall Customer
DXL Store Concept Designed Specifically for the Big & Tall Customer Large Changing Rooms Highly Trained Staff that Understands the Customer On-Site Tailoring Wide Aisles Bright Atmosphere Large Selection of Brands One-Stop Shop for the Big & Tall customer
Slide 11: The Destination XL Store Layout – A Lifestyle Approach
The Destination XL Store Layout – A Lifestyle Approach Effectively displaying the full range of brands and all categories Comfortable tailoring and fitting areas Ambiance appeals to target customers as well as women Located in high traffic locations with convenient access New Graphic from Peter with
Slide 12: DXL Roadmap to Stores and Additional Growth in Top Line Sales
DXL Roadmap to 400 Stores and Additional Growth in Top Line Sales Continue to execute on conversion of existing Casual Male to DXL – 265 stores Additional stores in both existing and new markets in USA – 75 stores Expand DXL concept into more outlet centers – 60 stores Continue to push Omni-channel
Slide 13: High-Growth Conversion Strategy from Casual Male to DXL
High-Growth Conversion Strategy from Casual Male to DXL The store growth trajectory in new DXL stores is significantly higher than mature Casual Male XL stores. (1) Customer acquisition in DXL occurs over several years as destination locations take more time to discover than mall locations.
Slide 14: Consistent 4-Wall Cash Flow Model with High IRR
Consistent 4-Wall Cash Flow Model with High IRR DXL Large Store Model DXL Small Store Model ($ in 000s; except psf data) Year 1 Year 2 Year 3 Year 4 Year 5 Sales $910 $1,050 $1,170 $1,280 $1,370 Sales per Square Foot $160 $185 $205 $225 $240 Gross Margin (net of occupancy) $380 $470 $550 $630 $690 G
Slide 15: DXL Stores Driving Impressive Return on Investment
DXL Stores Driving Impressive Return on Investment DXL Retail Stores1 Average Sq. Ft. Year One Sales PSF Year One 4-Wall Cash Flow PSF Capital Expenditures PSF2 IRR 2010 – 2012 (47 stores) 9,554 $151 $22 $80 30.0% 2013 (51 stores) 8,636 $145 $25 $77 38.0% 2014 (39 stores) 7,409 $151 $25 $73 43.0% 20
Slide 16: High-Growth Conversion Strategy from Casual Male to DXL
High-Growth Conversion Strategy from Casual Male to DXL 46 97 140 175 206 243 282 317 346 410 357 353 345 347 359 377 391 409 0 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500 0 50 100 150 200 250 300 350 400 450 500 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E DXL Casual Male Rochester D
Slide 17: International Franchising
International Franchising Selected Primary Expansion Opportunities Opening first Company or DXLG-owned stores in Canada in 2017 Expanding into new countries in 2018 and beyond Near-term priorities include Middle East, Western Europe and Mexico DXLG-owned Rochester UK store is second-highest performe
Slide 18: Significantly Improving Leverage Ratio
Significantly Improving Leverage Ratio Gross, before unamortized debt issuance costs. (2) EBITDA is a non-GAAP measure. See Appendix A for a reconciliation of this non-GAAP measure. (3) As of 8/31/16. Total Debt (1) $25.7 $52.3 $69.1 $61.5 EBITDA (2) $7.8 $14.1 $23.3 $33.0 Debt/EBITDA 3.3 3.7 3.0 1.
Slide 19: Funding DXL Store Rollout from Free Cash Flow
Funding DXL Store Rollout from Free Cash Flow In fiscal 2016, continue to project DXL stores will be funded completely from Free Cash Flow vs. Revolving Credit Facility
Slide 20: Strong Free Cash Flow Trend
Strong Free Cash Flow Trend Neg. Free Cash Flow* Pos. Free Cash Flow* EBITDA* CAPEX / Interest / Working Capital *Free Cash Flow and EBITDA are non-GAAP measures. See Appendix A for a reconciliation to their comparable GAAP measures. 2017E 2018E 2013 2014 2015 2016E
Slide 21: Financial Performance
FINANCIAL PERFORMANCE DESTINATIONXL
Slide 22: Pivotal Year in DXL Transformation
Pivotal Year in DXL Transformation DXL retail and outlet stores across the U.S. Expected number of DXL stores at completion Focused on opening 200 additional stores in five to six years Milestone year; expect to generate positive FCF $(0.09) to breakeven EPS guidance $(0.05) to breakeven non-GAAP EP
Slide 23: Proud of Success of DXL Transformation Strategy – Q2 2016 Key Metrics
2013 Proud of Success of DXL Transformation Strategy Second Quarter 2016 - Key Metrics Consecutive quarter of positive comps Increased sales, cash flow and profit Conversion rate of Casual Male customers Versus Q2 2015 End-of-rack percentage of bottoms business Up from 42.9% in Q2 2015 Increase in s
Slide 24: H1 2016 Highlights
H1 2016 Highlights DXL comparable store sales On top of +10.4% in H1 2015 Total H1 sales vs. H1 2015 Net income Versus net loss of $(1.6)M in H1 2015 EBITDA +25% Versus $13.5M in H1 2015 +5.2% +3.3% $16.9M Delivered growth in sales and profitability in challenging consumer environment $0.4M
Slide 25: H1 Income Statement Highlights
H1 Income Statement Highlights * On a non-GAAP basis, EPS, assuming a normalized tax rate, was $0.01 per diluted share for the first six months of fiscal 2016, compared with $(0.02) per diluted share for the prior year’s first six months. See Appendix A for a reconciliation to its comparable GAAP me
Slide 26: Cash Flow And Balance Sheet Highlights
Cash Flow And Balance Sheet Highlights H1 2015 H1 2016 Capital Expenditures: DXL stores $11.2 $9.7 Other maintenance/infrastructure 5.8 4.1 Total $17.0 $13.8 Inventory $123.6 $121.3 Clearance inventory 7.2% 7.7% Total debt* $63.9 $63.6 Borrowings under credit facility* $34.1 $41.2 Excess availabilit
Slide 27: FY 2016 Outlook
FY 2016 Outlook 2013 2014 Focus on top-line performance, accelerate EBITDA growth Continue to deliver performance in line with our plan Reach more customers who stay longer, spend more money and shop more often Stable operating model generates consistent results Continue to utilize free cash flow to
Slide 28: FY 2016 Guidance
FY 2016 Guidance Guidance Sales $457.0~$463.0 (1) Total comparable sales increase 2.0%~4.0% (1) Gross margin 46.2%~46.5% EBITDA* $31.0~$35.0 Net loss per share, diluted $(0.09)~breakeven Adjusted net loss per diluted share * $(0.05)~breakeven Total debt $59.0~$64.0 Total Capital expenditures Approxi
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Company uses non−GAAP financial measures, such as “EBITDA,” “Free Cash Flow,” “Free Cash Flow before DXL expenditures,” “Adjusted net income (loss)” and “Adjusted net income (loss) per share” in assessing its operating performance. The Company believes that these non−GAAP
Slide 30: Investor Contact
Investor Contact Jeffrey Unger V. P. Investor Relations Destination XL Group, Inc. jeffunger@usa.net 561-482-9715 (o) 561-543-9806 (c) www.DestinationXL.com
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